How Eskom really operates

As the main supplier of electricity in South Africa, Eskom is the most important state-owned enterprise and a cornerstone of the country’s economy.

Without a stable electricity supply, it is impossible for the economy to grow, create jobs, and alleviate poverty.

There is, however, a problem. Years of corruption and mismanagement have gutted the company, which is now saddled with a mountain of debt.

Eskom has also lost the ability to provide South Africa with a stable electricity supply, and load-shedding has become part of daily life.

So severe are these problems that the government had to intervene on multiple occasions to stem the deterioration at the company.

Most of these interventions came to nothing. This has, however, not stopped the government from launching a new turnaround plan and a new “war room” to implement this plan.

How Eskom functions

There are many different groups tasked with fixing Eskom, which include the board, the Department of Public Enterprises, the ministerial technical task team, and the former “war room”.

Speaking to Business Day TV, Eskom CEO Andre de Ruyter explained how all of these parts fit together in the company’s operations.

  1. Eskom Holdings SOC Limited is the legal entity of which de Ruyter is the CEO.
  2. Eskom has a board, which is chaired by Professor Malegapuru Makgoba. De Ruyter reports to this board.
  3. The Eskom board reports to its shareholder, which is the Department of Public Enterprises which is headed up by Minister Pravin Gordhan.
  4. Minister Gordhan is assisted by a technical task team which consists of experts in electricity generation, data analytics, and operational matters.
  5. The Political Task Team, formerly known as the Eskom War Room, assists the company with its turnaround strategy. It is chaired by Deputy President David Mabuza.

De Ruyter said the Political Task Team meets on a fortnightly basis and is a valuable tool to address roadblocks experienced in the turnaround strategy.

The issues which are typically addressed include municipal debt and National Energy Regulator of South Africa (NERSA) determinations.

The graphic below shows how Eskom operates.

Eskom CEO Andre de Ruyter interview

Now read: No, you don’t pay too much for electricity – Eskom CEO

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How Eskom really operates